Sale raises hopes of Pil­bara mine re­birth

The Ukrainian bil­lion­aire who paid $1.2 bil­lion for Con­sol­i­dated Min­er­als at the peak of the boom has sold the man­ganese miner to a Chi­nese com­pany, a deal that ob­servers hope could see pro­duc­tion restart at the moth­balled Pil­bara Woodie Woodie mine.

Gen­nadiy Bo­golyubov an­nounced last week he was sell­ing Con­sMin to China Tian Yuan Man­ganese, which is the world’s big­gest pro­ducer of elec­trolytic man­ganese me­tals.

The sale price was not dis­closed but Con­sMin said the new owner would take over its $US400 mil­lion debt.

China Tian Yuan Man­ganese is a sub­sidiary of TMI, which is Con­sMin’s big­gest cus­tomer.

“TMI has in­di­cated its will­ing­ness to in­vest sig­nif­i­cant re­sources in de­vel­op­ing the in­fra­struc­ture sup­port­ing Con­sMin’s Ghana­ian op­er­a­tions,” Con­sMin said in a state­ment.

While the state­ment did not dis­cuss Woodie Woodie, ob­servers say TMI’s pro-in­vest­ment ap­proach was a flicker of hope for the 380 work­ers who lost their jobs in Jan­uary when the mine, 400km south-east of Port Hed­land, was shut amid tum­bling man­ganese prices.

Those work­ers will pay close at­ten­tion to com­ments by TMI pres­i­dent Tian­jiang Jia that he looked “for­ward to part­ner­ing with the ex­ist­ing man­age­ment team in de­vel­op­ing the com­pany’s op­er­a­tions for the ben­e­fit of all stake­hold­ers”.

It is un­der­stood Woodie Woodie’s break-even point is more than $US3 a dry met­ric tonne of 44 per cent man­ganese ore. Prices were un­der $US2 when the mine closed this year.

Man­ganese is now worth about $US3.22 per dry met­ric tonne.

Be­fore it was shut, the Woodie Woodie mine ac­counted for ex­ports of about 1.5 mil­lion tonnes of high-grade ore a year, be­tween 5 and 10 per cent of the seaborne trade to China.

Last week’s agree­ment is sub­ject to gov­ern­ment ap­provals, the sign­ing of a key off­take agree­ment and the ap­proval of the hold­ers of $US400 mil­lion worth of Con­sMin debt.